Opposition to FBR's reform plan

It is very rare that the bureaucracy of a country opposes the government's move to overhaul its structure to improve its performance and re-mould its ranks with the needs of the times. Of late, however, some top officials of the Federal Board of Revenue (FBR) seem to have violated this rule by showing their unhappiness on the reform plan of their organisation to be undertaken by the present government. In a meeting with Chairman, FBR, Shabbar Zaidi, almost 23 chief commissioners demanded that the government should withdraw the proposed reform measures for the tax authority within two days. It was reported that this was the second meeting of the top tax officers within the past couple of days in which they had expressed their strong reservations over the proposed move. It may be mentioned that under the reform measures being considered by the government, it was proposed to abolish the posts of 23 chief commissioners who are presently heading the Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs) across the country. A statement issued by IRS Officers' Association after the meeting voiced support for the creation of a unified Pakistan Revenue Authority (PRA) but disagreed with the administrative structure being proposed for the body. In their view, the new reform measure is vague, half cooked and a misleading administrative structure and they are not in favour of implementing the measure before the inception of PRA. "The implementation of proposed structure should be stopped forthwith and all stakeholders should be taken on board for effective implementation of the vision of Prime Minister Imran Khan," their statement added. The Commissioners are also reported to have asked the Chairman, FBR, not to introduce reforms in haste in the FBR when the government has no plan to introduce reforms in many other organisations and that the revenue collection of the FBR has been enhanced from Rs 1 trillion to Rs 5 trillion since 2010.

The response of the Chairman, FBR, was very mild and he asked for cooperation from the Commissioners. He thanked them for "a very productive meeting" and promised to restructure/transform the FBR after taking into account the feedback of all the stakeholders, including all levels of staff in the organisation. He also insisted that the FBR was on target with regard to tax collections and that revenue growth was 16 percent in the first four months of the ongoing fiscal year.

It may be recalled that the present government during its tenure has tried very hard to narrow the budget deficit by proposing and implementing a variety of measures and introduced a number of reforms to deepen and widen the tax net against heavy odds. The opposition to these measures has always come from those sections of society who are badly affected by these measures like traders, businessmen, etc., as well as opposition parties who would always like to exploit the situation for political gains. This is probably for the first time in the history of the country that officers of the FBR themselves have opposed the government's move to restructure the organisation and given two days to the government to withdraw the reform measure aimed at abolishing the posts of some tax commissioners. It may be mentioned that though the commissioners are reported to have given a very short notice, yet they have not indicated the course of their action if the government does not meet their demands. They could go on strike or resort to pen-down action, slowing the normal functioning of the FBR for the acceptance of their demands. They would, in our view, also be encouraged by the gentle disposition and soft attitude of Shabbar Zaidi who, instead of reprimanding and scolding the commissioners for attempting to defy the legally constituted government, has tried to soothe their concerns by offering them some olive branches. The Chairman, FBR, could have easily told them to mind their own business because an elected government is certainly empowered to design policies which have to be implemented by the official machinery, whether the concerned officials like it or not. It was all the more incumbent on the tax commissioners to accept the command of the government when the government is not going to fire them but retain their services for some vital purposes, most probably in the newly-created PRA.

The defiance on the part of commissioners is all the more worrying when the budgetary reform measures introduced by the present dispensation and agreed with the IMF are being opposed tooth and nail by most sections of society and they were supposed to extend a helping hand to the government to enable it to reach its abnormally high tax targets. Besides, the claim of the commissioners and Chairman, FBR, that they are doing a good job is not at all true. Total tax collections, for instance, during the outgoing year and the current fiscal, are far behind the targets and have forced the government to borrow heavily from various sources to finance the bulging budget deficit. Overall, we feel that all the stakeholders including the government and tax machinery need to put their heads together to collect the maximum amount of taxes and work harder to achieve this goal, rather than raising demands which are hard to meet and may not be lawful as well.